NESTLE JUICES

Group 5 :

Shaiyanne Mall Sheryar Taqi Muhammad Ahmed Abdullah Shahid Umar Talha

Objectives

Introduction

Industry Analysis

Procurement Process

Recommendation

Q/A Sessio

Introduction

Nestle is providing safe, quality nutrition for more than 140 years.

Nestle is currently operating in more than 197 countries, with 2000+ brands.

Their objective is to be the leader in nutrition , health, and wellness.

Currently there are 24 fruit juice/pulp processing plants in Pakistan.

Capacity of more than 400,000 metric tons back in 2008.

Current revenue growth rate of 12% as of 2015 .

Products

Nestle has established two brands to combat competitors in two separate target markets, namely : Nesfruta and Fruita Vitals. Pineapple from Indonesia Guava from Pakistan Apple from Turkey Mangoes from Pakistan Red Grape from Italy Peach from Greece

Industry Analysis

FMCG industry High turnover, large sales volume, low price High industry growth rate – CAGR 18% Nestle has 35% market share Pakistani demographics favor further growth

Market Share

Industry Analysis

Juices Nestle Nesfruta vs Country and Shezan Nestle Fruita Vitals vs Malee and Fruitien Seasonal variations

Revenue Trends

Industry Analysis

Economic factors: Inflation rate Infrastructure facilitating business

Legal and regulatory policies

Social Factors

Technological factors

Procurement Process

Evaluation of supplier through Quality Audits Major factor in supplier selection- flexibility Vendors are approved by the Quality

Assurance Department followed by price negotiations

Price quotations are drafted containing particulars

Transportation of fruits from international suppliers- under Cost and Freight Terms

Procurement Process A year long contract signed with the suppliers Consideration of different factors when

forecasting Lead times Foreign Currency Fluctuations Purchase order has been placed Detailing types, quantities and agreed upon

prices for products

Transportation time of fruits from Europe- 30 days

Cost of Shipping- USD 75/ton

Procurement Process

Transportation of fruits to the juice processing plants:

Sheikhupura

Kabirwala Contracts with companies for packaging-

Tetrapak, Packages and APL Use of VMI and its incorporation in the firm

wide ERP Use of Advanced Planning and Optimization

application in the Supply

Procurement Process

Supply Chain Management System Functionalities that span different

functional areas Demand Supply Matching Transport management In-depth production scheduling

Supply Network Planning

Procurement Process

Juices on completion of production undergo a Relax Time which is 6-7 days

During relax time- Inspection Audits are carried out to ensure quality

Division of Target market into 3 zones Central Northern Southern

Procurement Process

Transportation of juices to retailers and wholesalers through trucking companies

Trucking companies also Quality control departments

Major retailers are Hyperstar and Metro who order 3000 tons/ month of Nestle Juices

Recommendations

Bridge the gap between planning and procurement

The procurement department is a ‘lagging department’ whereas; it should be the ‘leading’ one.

THANK YOU